Europe’s Vimpelcom has hit a brick wall regarding the disposal of its African mobile networks, reports TMTFinance.com.
Telecel Globe represents VimpelCom’s operations in sub-Saharan African nations that include Zimbabwe, Burundi and the Central African Republic.
In June 2013, Vimpelcom agreed to sell its Burundi and CAR businesses to NIEL Telecom for 75 million euros, reports TMTFinance.com. In Burundi, Vimpelcom operates under the brand name Leo, while in CAR the business is called ‘Telecel Centrafrique’.
But TMTFinance.com reports that NIEL Telecom is struggling to raise funding for the deal, jeopardising the sale.
Luxemburg-headquartered NIEL Telecom describes itself on its website as “a global, integrated telecom operator focused on high-growth markets” with “more than 2 million subscribers use our mobile and broadband services every day.”
“TMT Finance sources said that NIEL had struggled to get sufficient financing in place for the deal, with talks now flagging,” reports the publication.
“One source said it was likely that Vimpelcom would start reaching out to other buyers if the situation was not resolved, with various parties such as Africell and LapGreenN also said to have also been interested in the assets. Standard Chartered advised Vimpelcom on the transaction,” says TMT Finance.
The report further says that Vimpelcom is looking to sell its Zimbabwean business.
“But frictions and complexities with the government and local shareholders have impeded any process thus far, sources added,” reads the TMT Finance report.
Telecel Zimbabwe briefly lost its operating licence last year as government piled pressure on the company to conform to an indigenisation policy that calls for 50% local ownership of foreign firms in the country
Vimpelcom’s results for the first quarter ending March 2014 revealed that its sub-Saharan African operations, under the Telecel Globe umbrella, recorded 4.417 million mobile subscribers.
Telecel Globe also notched up total operating revenues of $22 million for the first quarter of 2014, up from $20 million in the same period last year for the first quarter.
Meanwhile, earnings before interest, taxes, depreciation and amortisation (Ebitda) for Telecel Globe jumped 51% from $6 million in the first quarter of 2013 to $9 million for the same period this year.
VimpelCom has 218 million mobile customers worldwide, spanning 17 countries that include the likes of Russia, Italy, Pakistan and Canada.
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